Latest news with #MPGC2025
Zawya
12-06-2025
- Business
- Zawya
Geopolitical fragmentation is reshaping global energy markets - S&P Global SVP
Global energy markets are being reshaped by rising geopolitical tension, trade realignments, and a shift away from the old international order. Against the backdrop of the 32nd Annual Middle East Petroleum & Gas Conference (MPGC 2025) in Bahrain last month, Carlos Pascual, Senior Vice President for Geopolitics and International Affairs at S&P Global Commodity Insights, offered a sweeping overview of how trade disputes, global rivalries, and supply chain realignments are redefining the global energy and commodity order. Speaking to Zawya Projects, Pascual dissected the structural shifts underway—from US-China tensions and the decoupling of trade routes, to the reconfiguration of hydrocarbon flows and the emerging critical mineral economy—and why energy diplomacy, once again, is taking centre stage. Erosion of the old order 'We've seen a shift in the development of the global and international order,' Pascual noted. 'We were in a global environment that was focused on the rule of law, on democracy, on open markets, on interdependence. And increasingly, we've moved to a world that is number one, transactional—and this is very much driven by the United States.' Citing the political philosophy behind 'America First' and 'Make America Great Again,' Pascual framed the landscape as one where short-term, nationalist interests increasingly override multilateralism. 'As President Trump has said, his favourite tool is tariffs. Tariffs are a protectionist measure... they affect the pace and the tendency of globalisation.' Rather than a new world order, the S&P executive argued, we are witnessing an erosion of the old: a structural uncertainty that has become embedded. 'It doesn't mean that the United States isn't the most powerful and richest country in the world, but it's operating in a different kind of environment... one in which there is much more polarisation. And I think we have to get used to a world where that kind of polarisation and uncertainty is going to be with us for a while.' US-China rivalry and hydrocarbons The real-world implications of this erosion are most evident in the energy and commodities trade, particularly in the context of US-China rivalry. 'There's obviously a phenomenal trade war. Both countries had this massive escalation of tariffs.' A temporary truce struck in May 2025 signalled that both sides understood the damage. 'Even though the tariff levels are still high both sides recognise that it is not in their self-interest, nor is it their desire, to battle in that level of a trade war.' In terms of hydrocarbon demand, China is no longer the insatiable buyer it once was. 'For two decades, China was the biggest source of global oil demand. Today... for the last six months of 2024 in China, they were selling well over 50 per cent of new vehicles as electric vehicles,' he said. 'Gasoline demand in China peaked in 2023. Oil demand is probably going to peak in 2027 or 2028. It's already flattened out.' The broader backdrop of slowing demand, particularly in the US and China, adds downward pressure to oil prices. 'Our economists project that by the fourth quarter, the United States will be growing at less than 1 percent. You're seeing this softening of global demand... at the same time that OPEC+ countries are unwinding some of their previous cuts.' Pascual warned that this supply-demand dynamic could push oil prices down significantly: 'We're seeing a potential for a very significant price decline... in the range of below $60 per barrel.' Sanctions, realignment and the rise of energy blocs Another consequence of the current geopolitical architecture is the reconfiguration of oil flows, particularly from sanctioned states. 'The obvious thing that we've seen as a result of the imposition of US and European sanctions on Russia, and sanctions on Iran, is that trade flows have changed,' he said. These policy tools were never intended to eliminate Russian oil from global markets altogether. 'If you remove Russian oil from the market, everybody's going to pay. Every single consumer is going to pay,' he explained. Instead, the West's strategy was to constrain the logistics, by regulating shipping, while allowing the supply to continue flowing. This, in turn, has triggered a redirection of trade: 'Russian oil [is] going to China and India, with some price discount. Iranian oil has been going to China for some time. China has put in place mechanisms where the shippers and the importers and the banks are completely removed from the US system.' Even if sanctions were removed, Pascual believes their structural impact has already occurred. 'There may be a realignment... but that realignment of oil is going to depend on other things, like what happens in the war on Ukraine.' US policy uncertainty hits investments The volatility in US foreign policy—and the energy sanctions environment in particular—is increasingly weighing on long-term investment. 'Inventories right now are relatively low... if we see the continued increases that we're projecting out of the OPEC+ countries, in a very short time we'll be at the high end of inventories.' He noted a significant trend emerging domestically: 'What we're already seeing in the United States is that most of the major oil companies are reducing their capex.' When it comes to long-term energy demand, Asia still dominates the global outlook. 'The energy requirements of both [India and China] are massive. Growth in China has slowed, but even at 4 to 5 percent, you're still going to see massive energy demand.' While oil demand is flattening, Pascual emphasised the rise of natural gas and renewables in Asia's energy mix. 'We're going to see the biggest increases in primary energy demand throughout Asia.' Batteries and renewables are rapidly gaining ground as viable, cost-effective sources. 'We're going to see greater competitiveness out of batteries... not that we're going to see a shift out of oil and gas, but they're going to plateau.' The Gulf's dual focus: hydrocarbons and decarbonisation In Pascual's recent visits across the Gulf, including MPGC in Bahrain and meetings in Saudi Arabia and Doha, he observed a 'recognition' of the need for diversification. 'The investments that you see in Saudi Arabia, in particular in solar energy... and the increased competitiveness of batteries, even with natural gas, are emerging as real opportunities,' he said. 'It's not taking away the importance of gas... but there's a new competitiveness that we're seeing arise with solar and with batteries, especially in the Middle East.' This, in turn, has triggered a regional awakening around critical minerals. 'People used to talk about that especially related to electric vehicles, but now they're looking at it as grid storage as well,' he said. 'It's becoming such an important factor in the energy mix.' Asked about the message of MPGC 2025 in Bahrain, Pascual underscored the role of diplomacy and regional leadership. 'The importance of energy diplomacy and the engagement of international players has never been more important,' he said. 'Local actors are making decisions... Saudi Arabia, UAE, Kuwait—these are the players setting the tone in oil markets.' He warned, however, of upcoming volatility in the gas sector: 'There's a potential for oversupply over a period of three years, from 2027 to 2030, but then a rebalancing of the market.' Interestingly, he noted that US policy on sanctions could have a major commercial effect, especially on LNG investments. 'The biggest impact is on Final Investment Decisions (FIDs) on projects in the United States. It could potentially affect what we've estimated would be $120 billion worth of investment decisions.' Despite ongoing reliance on fossil fuels, Pascual believes the private sector recognises the climate imperative. 'Companies are recognising that climate change is a reality, and the need to decarbonise is going to be a necessity,' he said. 'Simply putting those concerns aside isn't going to work.' Strategic resource politics Looking ahead, Pascual sees South Asia and Southeast Asia as the fastest-growing energy consumers, but another set of commodities is fast becoming central: critical minerals. 'These are important for the energy transition, for artificial intelligence, and for defence,' he said. 'Previously, there was a huge amount of discussion about this related to electric vehicles. But what we're also finding is that the growth of AI... has now made that a national security imperative.' Countries that can mine and process lithium, cobalt, graphite, and rare earth elements will become essential to global supply chains. 'There's going to be a push for diversification,' he said. 'Latin America is going to become much more important on lithium and copper... and Africa too.' Pascual's analysis paints a picture of an energy system shaped not just by technology and transition, but by geopolitical dislocation and realignment. From trade wars and decoupling to investment delays and new energy blocs, the system is undergoing a reconfiguration that is as strategic as it is structural. Despite the proclamations of 'drill, baby, drill,' in the end, it's oil markets—and geopolitical reality—that are the 'fundamental determinants of where we go', he concluded. (Reporting by Rajiv Pillai; Editing by Anoop Menon) (
Daily Tribune
27-05-2025
- Business
- Daily Tribune
Call for Balanced Energy Strategy: Bahrain Eyes SMRs and Offshore Wind as Part of Energy Diversification
TDT | Manama Mark Thomas, Group Chief Executive Officer of Bapco Energies, opened the 32nd Middle East Petroleum & Gas Conference (MPGC 2025) with a compelling keynote address, emphasizing the need for pragmatic, long-term planning in an era of 'unprecedented uncertainty.' Speaking at the Four Seasons Hotel in Manama, under the presence of H.E. Dr. Mohamed bin Mubarak Bin Daina, Minister of Oil and Environment and Special Envoy for Climate Affairs, Thomas welcomed delegates to what he described as "the region's most enduring forum for energy dialogue," hosted by Bapco Energies in partnership with S&P Global Commodity Insights. 'People often say we live in uncertain times. But more than that, we live in unprecedented uncertainty,' Thomas remarked, setting the tone for a two-day conference focused on balancing traditional and renewable energy pathways in the Middle East.
Daily Tribune
27-05-2025
- Business
- Daily Tribune
"What's Fueling the Future?" Energy Experts Map Out the Region's Next Frontier
TDT | Manama Industry leaders gathered at the Middle East Petroleum and Gas Conference (MPGC 2025), held at the Four Seasons Hotel in Bahrain, to exchange insights on the evolving energy landscape, focusing on the theme 'Navigating the Energy Frontier: A Middle Eastern Perspective.' Opening the discussion, Alexander Van Veldhoven, Group Chief Strategy Officer at Bapco Energies, highlighted the pressing challenges in energy efficiency and infrastructure. 'Energy efficiency is crucial—but the practical concern right now is comparative pricing and land availability,' Van Veldhoven said. 'One solution could be sourcing land in Saudi Arabia to begin interconnection projects.' He also expressed skepticism about labeling gas as a transitional fuel, noting that hydrogen, while promising, becomes prohibitively expensive when it comes to transportation. 'For hydrogen to be viable, we must focus on affordable transport and supporting infrastructure,' he added. Joining the panel was Musaab Al-Mulla, Vice President of Market Analysis & Sustainability at Aramco, who emphasized the strategic importance of energy in economic transitions, particularly in emerging regions. 'Energy is at the heart of economic transformation,' Al-Mulla stated. He pointed to disparities in energy transitions across continents, particularly between India and Africa, as a sign of the complex path ahead. 'Our 2025 target is for renewables to make up 50% of our energy mix,' he revealed. 'By 2030, we plan to further scale up gas usage to meet growing demand.' The discussion reflected the Middle East's critical role in balancing traditional energy exports with ambitious sustainability targets, underscoring the importance of regional cooperation, strategic planning, and investment in technology and infrastructure. MPGC 2025 continues to serve as a key platform for dialogue between policymakers, energy executives, and industry analysts, as the region works toward a more resilient and diversified energy future.
Daily Tribune
16-05-2025
- Business
- Daily Tribune
Bahrain to host Middle East energy summit
The 32nd Annual Middle East Petroleum & Gas Conference (MPGC 2025), organized by S&P Global Commodity Insights and hosted by Bapco Energies, is set to take place in the Kingdom of Bahrain from May 26-28. The event, held in the presence of Dr. Mohamed bin Mubarak Bin Daina, Minister of Oil and Environment and Special Envoy for Climate Affairs, seeks to facilitate critical dialogue regarding the region's energy landscape in the context of escalating global demand for sustainable solutions. MPGC 2025 will feature a distinguished lineup of industry leaders and experts who will engage in discussions around the theme of 'Balancing Traditional and Renewable Energy in the Middle East.' The conference will serve as a vital platform for exploring global market dynamics and the future trajectory of energy. The inaugural day (May 27) will commence with keynote addresses from Mark Eramo, Co-President of S&P Global Commodity Insights and Mark Thomas, Group CEO of Bapco Energies, with Dr. Mohamed bin Mubarak Bin Daina in attendance. The agenda will encompass topics such as navigating the energy frontier, geopolitical influences on markets, and an in-depth examination of global oil and gas dynamics. On the second day (May 28), the focus will transition to downstream perspectives and low-carbon energy sources. Attendees can expect presentations and discussions addressing refining outlooks, transportation fuels, sustainable aviation fuel, and the integration of gas with solar and nuclear energy, alongside the pivotal influences of carbon markets. 'MPGC 2025 represents a crucial platform for industry stakeholders to convene and explore the complexities of the energy landscape, fostering collaboration and innovation towards a sustainable future. We look forward to welcoming attendees to this important event, which underscores the significant role the Middle East plays in shaping the global energy landscape,' said Lyn Tattum, Vice President and Head of Events at S&P Global Commodity Insights. Participants from the Middle East, Asia, Africa, Europe, and the Americas are expected to gather at MPGC 2025, including key stakeholders from the oil and gas sector, financial institutions, regulatory bodies, and renewable energy industries.
